Up to a dozen developers and investment syndicates had been preparing to bid for the New Ireland Assurance buildings with the intention of redeveloping them for at least six storeys of retail space, writes Jack Fagan

Bank of Ireland has postponed for the moment the sale of two adjoining office buildings in Dawson Street, Dublin 2, which were set to be demolished to make way for a large department store.

The five and six-storey New Ireland Assurance office blocks had been expected to make over €60 million. A bank spokesperson said a review of their property portfolio had been carried out and there were no plans to sell the Dawson Street buildings.

The bank has not given any reason for putting off the sale but one source suggested that it was linked to the search for a massive new headquarters in the Dublin area.

One possibility is that the bank may be planning to offer Dawson Street to an office developer in part exchange for a new headquarters which is expected to range between 37,160sq m (400,000sq ft) and 55,740sq m (600,000sq ft).

Savills HOK, which had been appointed to handle the sale of the Dawson Street property, said yesterday that it had "no comment" to make.

The original plan was to sell the two buildings and lease them back for a period of up to three years to allow staff to stay there until the new headquarters is ready to move into.

Before that, there had been some resistance from staff to a move away from such a convenient city location.

Up to a dozen developers and investment syndicates had been preparing to bid for the New Ireland buildings with the intention of demolishing them and replacing them with a high quality block of at least six storeys with shopping at all levels.

The formula - similar in many ways to the development being carried out in South King Street by businessman Joe O'Reilly - would have appealed to Dublin city planners because not only would it have led to the demolition of two unattractive 1960s and 1970s office blocks, but it would have greatly strengthened the appeal of Dawson Street as a retail venue.

One of the advantages of the site is that it fronts directly onto Dawson Lane, linking Dawson Street with South Frederick Street.

The two New Ireland buildings have a floor area of almost 4,645sq m (50,000sq ft) and back onto a modern office complex of 1,858sq m (20,000sq ft) owned by Bank of Ireland Asset Management.

This block on South Frederick Street is largely unoccupied and had also been expected to go for sale at the same time.

One property expert said yesterday that he believed the Dawson Street buildings would eventually go on the market because of their high capital value and the tendency to relocate office facilities off high streets to more traditional office locations.

Bank of Ireland, like AIB, has been selling many of its branches and leasing them back to free up dormant capital for its core business.